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Subscription Management

What are Discounts and Coupons?

Offering a discount is defined as slashing the price of a product to give customers something they can’t refuse. Running promotional discounts/coupons is a viable customer acquisition strategy for SaaS businesses looking to get more leads and profits.

Using Discounts and Coupons in SaaS to grow your revenue


Psychologically, the term ‘COUPON’ creates happiness. Customers find delight and joy in receiving an exclusive offer. They even spend multiple hours a week just looking for ways to save money. Discounts offered day after day are what keeps retail companies spinning, a lot of the time.


But SaaS isn’t retail. In SaaS, the purpose of offering a discount is not just to offer a price slash to get a customer onboard but also to retain him for a greater LTV. A study by Price Intelligently found that SaaS discounting lowers long-term value (LTV) by 30 percent, as well as producing a higher churn rate and lower willingness to pay higher prices. Thus, if discounts are not offered intelligently, they might not be a great idea.



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Effective discounts, promotions and coupons strategies:


  • Discounts for beta users:

    If you’re working on a new product and have been in beta mode with live users testing your software but feel that you are finally ready to release the final product, one of the best promotional stunts you can pull is to give your loyal beta users a discount on the final product.

  • Time-sensitive discounts: Discounts should always be time-sensitive. If you don’t put some bookends on the offer, it will look like you are just discounting your product for no reason. This can also devalue your product.


    A lot of companies use time-sensitive discounting as a way to instill a fear factor in potential customers.

  • Referral discounts: If you run an affiliate program, reward the affiliate marketers who are really advertising your product with a tiered system of rewards and discounts. Does someone refer five of their friends? Start giving them a month free at that point, or even a heavily discounted rate on their next billing cycle.

  • Seasonal promotional campaigns: Seasonal promotions are another popular way for companies to see a surge in business. Get creative with your discounts every year, especially around the end of the year when many businesses are looking for new services to work within the coming year.

  • Loyalty discounts: Have a customer who has been around for five years? How about an entire decade? Instead of giving them a congratulatory email, you can send out promotional coupons to loyal customers. Such good PR can mean they make a shout about your business and their friends start using your service.


Hence, discounts used at the right time can always nudge prospective customers in the right direction.




Additional Reads


More reads about SaaS businesses running promotional discounts and coupons to grow revenue:



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